The area around the University of Puget Sound is one of North Tacoma’s finest. In addition to a number of beautiful historic homes, the area is dotted with rentals for UPS students to live in while they are attending college.
From seasoned investors to parents looking to find a great place for their kids to live and make a great investment in the process, there is always a strong interest in the rentals around UPS. We regularly assist clients with purchasing and selling investment properties by UPS and around the rest of the county. We think that in the current climate of climbing rents, historic low prices, and rock bottom interest rates make this a great time to invest in a rental near UPS. Here are some answers to some commonly asked questions about buying rentals:
How much do I have to put down?
Most lenders require between 20-25% down for non-owner occupied purchases of investment properties. There are lots of factors involved (mainly your income and credit history) but that’s about average. If you are considering an owner occupied rental (for example, buy a duplex and living in one unit while renting out the other) you can purchase the property for as little as 3.5% down using FHA financing.
How do I figure out how much the units can rent for?
The price per square foot of a rental varies by location, condition, and amenities. In the UPS area you can probably assume about $1 per square foot as a minimum and explore the rents of similar units on Craigslist, but nothing beats the expertise of a good local property manager. We can recommend some.
What are the tax advantages of having a rental?
This is easily one of the main advantages of owning a rental property. While income you make from your rental must be reported as income, many repairs and improvements you make to the property are tax deductable. Things like your mortgage interest, depreciation, property management fees, and insurance are also deductable. There are so many potential deductions it’s worth it to have an accountant go over your books.
While finding the right rental property at the right price can take some time, the combination of excellent interest rates, historically low prices, and our extensive knowledge could make this a golden moment for buying a UPS rental property. Contact us today to get started!